American maternity retailer Destination Maternity is planning to raise cost savings of around $4m to $4.5m on an annualised run-rate basis through reduction in force (RIF).
The move is part of efforts to make the business more efficient and profitable, said the company.
The RIF is expected to primarily impact the company’s product pipeline teams as it focusses on item driven assortment with more emphasis on evergreen product.
Destination Maternity chair of the office of the CEO Lisa Gavales said: “This reduction in force is a very difficult, but necessary step for the company.
“We are streamlining our teams, and sharpening our product offering to focus on the key items that are most important and relevant to our new moms and ‘moms2be’.
“While challenging, this is a critical step in helping to position the business as a more nimble and profitable organisation in the future.”
In addition, the company noted that the RIF will result in a one-time severance charge of approximately $1.3m to $1.5m during the second quarter of this year with severance benefits made ratably.
The retailer will also offer customary transition assistance to affected employees.
Gavales added: “We would also like to express our appreciation to each of the employees impacted by this decision for their meaningful contributions to the company.
“We remain committed to treating impacted associates with respect and support through this transition.”
Destination Maternity currently operates 998 retail locations, including 452 stores in the US, Canada and Puerto Rico. It has 546 leased departments in department stores and baby specialty stores across the US and Canada.
Earlier this month, the company reported a 7.2% decline in comparable sales for the first quarter of 2019.